Making the Most Out of Your Open Enrollment

I can’t believe it’s November already. That means it’s time to gear up for the end of the year. You’ll want to make sure all of your 2018 to-dos are checked off before 2019 rolls around. We’ll be talking about other year-end tasks in the coming weeks, but let’s tackle open enrollment in company benefits first.

When you were first hired, you probably made a lot of choices and signed a lot of papers regarding your benefits. If you don’t do anything, you will likely be reenrolled in the benefits options you selected — the same health insurance, the same dental, the same life and disability coverage. But what if things change? Once a year, during open enrollment, your employer allows you to change your insurance protections. You can add, drop or change your medical, dental, life and disability coverage. Open enrollment serves as great incentive to review your spending over the past year and see if your coverage fits your needs.

Here are five tips to making the most out of this deadline.

Start early

Ben and I are procrastinators — and maybe you are, too. But don’t leave the assessment and changes until the last minute. Because open enrollment only comes around once a year, it’s important to give yourself enough time to figure out what works best for your situation.

If you haven’t seen your open enrollment deadline yet, ask your human resources representative. Most companies only allow two or three weeks, so don’t get caught off guard.

By the way, if you haven’t created an insurance organizer, now is the time perfect time to get everything together. You should start by gathering your benefits statements and outlining the details of all of your coverage. Pay special attention to your premiums, deductibles and out-of-pocket expenses to calculate the total cost.

Open enrollment is especially important time if you’ve had or plan to have a major life change like marriage, divorce, having a child or death in the family. Most policies allow you to update your coverage when a life change occurs, but the changes may be limited to adding or dropping an additional person to or from your coverage. You may not be able to change to a different type of policy after open enrollment.

Did you get married? Compare your and your spouse’s coverage to see who gets you the best bang for your buck overall.

Having a child? You’re probably going to have higher health costs than before, and you might need different insurance coverage to meet your needs. Most policies have specific coverage limitations for pregnancy, so compare your different options and figure out which one gives you the most flexibility in your situation.

Take into account all the factors when you’re comparing plans

Many people focus primarily on premiums when they choose an insurance policy, but this can be a mistake. Make sure you also take into account other important features of your coverage including:

Accessibility: You’ll want to make sure that your plan covers the doctors and prescriptions that you know you’ll use. For instance, when Ben and I were comparing plans, we wanted to keep our current primary-care providers, and only one insurance company covered them both. That access was more important than cost.

Cost: Consider the total costs to you, including premiums and deductibles and cost-sharing. A plan with a higher deductible should have lower premiums. The worst-case cost — if you have a major illness or accident, for instance — will likely be higher with the high-deductible plan. However, if you’re healthy and don’t use a lot of medical services, the total cost will be lower.

Services: When considering the costs, you should also determine at what rate the services that you need — mental health, prescriptions, etc. — are covered under each plan. You want the plan that covers most of your actual costs.

Risk: Ask yourself what the potential risk is worth to you. A high deductible plan or one with a high out-of-pocket maximum could cost you a lot in the worst-case scenario. If that type of situation scares you, a higher premium for more coverage may be worth it to you.

Don’t forget the other benefits

Health insurance usually takes center stage around open enrollment time, but remember that your employer likely offers other coverage as well. And some of these benefits don’t cost you anything. If you have access to employer life and disability insurance at no cost, make sure you take advantage of that.

If you have to pay additional money for these extra benefits, you’ll need to determine whether the policies your company offers provide sufficient coverage. Most employer plans don’t, in my experience, so you may need additional, independent coverage. But some coverage is better than no coverage. And it’s still good to know what your employer provides because that will affect how much coverage you need or are even allowed through independent channels.

I hope this helps get you get a jumpstart on open enrollment. One last tip: if you’re combining benefits with a spouse, sit down together to review everything. While one person may be the “financial person” in the household, it’s important that both spouses understand the amounts and types of coverage that you have.

Feel free to shoot me a message with any open enrollment questions at the links below.

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Brian Thompson Financial LLC (“BTF”), is a Registered investment Adviser in the State of Illinois. Based in Chicago, BTF focuses specifically on serving the LGBTQ community locally and nationwide. Brian Thompson, JD, CFP® is a proud member of NAPFA, XY Planning Network and Pride Planners.